EurWORK European Observatory of Working Life

The 'PEPPER' reports

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In the process of preparing a Community instrument on the promotion of participation by employed persons in profits and enterprise results, the European Commission funded a research project with the specific aim of obtaining a good overview of 'the state of the art' concerning financial participation by employees in the EU. This resulted in the so-called 'PEPPER I report'. The report (based on work carried out from 1989-1991):

  • introduced a typology of financial participation schemes
  • reviewed the situation in each of the then member states (Belgium, Denmark, Germany, France, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain and the United Kingdom)
  • made recommendations to the Commission.

Download the 'PEPPER I Report' (pdf file, 23 MB, 233 pages). Warning: very large file. Reproduced by permission of the Commission of the European Union.


In July 1992 the Council of Ministers adopted a Recommendation concerning the promotion of participation by employed persons in profits and enterprise results known as the PEPPER recommendation and largely based on the PEPPER I report. In the Council Recommendation, the Commission undertook to present a report to the European Parliament, the Council and the Economic and Social Committee on the application of the recommendation. On the basis of the information supplied to it by the Member States, the Commission adopted the so called PEPPER II report in January 1997.

One of the main conclusions of the PEPPER II report is that Member States have hardly, if at all, engaged in information exchanges regarding best practices, despite the potential positive effects of financial participation schemes on productivity, wage flexibility, employment and worker involvement.

Download the 'PEPPER II Report' (pdf file, 3.29 MB, 44 pages). Reproduced by permission of the Commission of the European Union.


The PEPPER III Report extends the previous two reports to cover the new Member States and Candidate Countries (Croatia, Bulgaria, Romania and Turkey) of the EU. The initial research was undertaken by a team of researchers from both old and new Member States. For each country a team of economic and legal experts investigated the nature and extent of employee participation and its future prospect. Countries were divided into four groups on a regional basis: Central and Eastern Europe, the Baltic States, South Eastern Europe and the Mediterranean block (Turkey, Cyprus and Malta).

The analysis of the legislative framework has shown that there are practically very few laws specifically dedicated to employee financial participation. In both the former socialist states and the non-transition countries, the laws enabling forms of employee financial participation refer almost exclusively to employee share ownership, as there have been only a few cases of legislation on profit-sharing. More recently, however, the conditions for employee ownership have generally been more restrictive and there has been a general tendency towards the reduction of ownership by non-managerial employees.

Suggestions for future initiatives which could contribute to a more widespread diffusion of employee financial participation in the enlarged EU are being made to both the EU Member States as well as to the Commission.

Download the 'PEPPER III Report' (pdf file, 1.8 MB, 353 pages)
Promotion of Employee Participation in Profits and Enterprise Results in the New Member and Candidate Countries of the European Union (Lowitzsch, 2006).


The PEPPER IV Report summarises and updates the previous PEPPER reports. This EC project implemented benchmarking indicators developed by Eurofound in all 27 EU member and 2 candidate countries.

The Report presents conclusive evidence that the past decade has seen a significant expansion of employee financial participation in Europe. On the other hand, despite this positive trend it seems that financial participation has been extended to a significant proportion of the working population in only a handful of countries.

The Report is divided into three parts:

  1. A presentation and discussion of the benchmarking project and results as well as an analysis of the fiscal framework and tax incentives in the EU 27
  2. Country profiles covering the attitudes of social partners and government policies, the legal foundations for different schemes and, where available, the incentives for their application
  3. A summary of the experience of employee financial participation in Western and Eastern Europe, its role in the changing world of work in the 21st century and its relevance in the context of the European integration process.

Download the 'PEPPER IV Report' (pdf file, 1.2 MB, 240 pages) Benchmarking of Employee Participation in Profits and Enterprise Results in the Member and Candidate Countries of the European Union (Lowitzsch, Hashi, Woodward, eds. 2009).